LMAX - Overnight charges both ways on all pairs | Forex Factory

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LMAX - Overnight charges both ways on all pairs

  • #1
  • First Post: May 6, 2021 8:30pm May 6, 2021 8:30pm
Am I being a noob or is something amiss here?

Example:

Swap rates for AUD/USD are 0.63/-0.47

Their terms say

Financing charges on rolling spot FX are also referred to as swap charges and are quoted in swap points.
A negative swap point if you are net long the FX pair will result in your Account being credited, and you will
receive funding. A positive swap point charge when long will result in your Account being debited and you
will pay funding.

Meaning that longs get charged 0.63, and shorts get charged 0.47.

Have I just been retail too long?? As this seems nonsensical to me given the actual interest rate differentials
  • #2
  • May 7, 2021 3:40pm May 7, 2021 3:40pm
All brokers scam like this. Oanda changers arm and leg for both sides. Its how they make money.
  • #3
  • May 7, 2021 8:24pm May 7, 2021 8:24pm
Ridiculous. Anyone have recommendations? For a slightly more 'honest' one?
  • #4
  • May 7, 2021 11:42pm May 7, 2021 11:42pm
I've never fully understood the if negative and long they will credit you. Seems overly complicated. - should just be plus or minus for credit or charge...and most brokers function like that.

Anyway, swaps are just past of the game and I'm not aware of LMAX being particularly bad. Their swaps should be in line with other brokers given the differentials else they will be eaten for breakfast by swap arbitrage traders.
  • #5
  • May 8, 2021 4:50am May 8, 2021 4:50am
I have not had opportunity to trade on Lmax because it is not convenient for me. But, whoever transacted on this broker can share what they have good points and which ones are not good?
  • #6
  • May 10, 2021 2:18am May 10, 2021 2:18am
Quoting kennyhubbard
I've never fully understood the if negative and long they will credit you.
Because it is a charge, a positive value means you are charged something (-+ equals -), and if the charge is negative, then you are credited (-- equals +). This is how I understand it.
Return To Disorder
  • #7
  • May 10, 2021 7:23am May 10, 2021 7:23am
Quoting kennyhubbard
I've never fully understood the if negative and long they will credit you. Seems overly complicated. - should just be plus or minus for credit or charge...and most brokers function like that. Anyway, swaps are just past of the game and I'm not aware of LMAX being particularly bad. Their swaps should be in line with other brokers given the differentials else they will be eaten for breakfast by swap arbitrage traders.
Agree to the first part. However, their swaps look like they are priced very good. However, when they flip it at the end, it means a) you'll never get an actual credit from any instrument (no long swaps are priced - and no shorts are priced +), and b) arbing just won't work
  • #8
  • May 10, 2021 7:24am May 10, 2021 7:24am
Quoting sunter22
I have not had opportunity to trade on Lmax because it is not convenient for me. But, whoever transacted on this broker can share what they have good points and which ones are not good?
Everything seemed good up until this point. Very crafty in that if you're in a swing trade for 100 days, you're looking at 100+ negative points on average, as OPPOSED to 100+ positive on most other brokers.... doesn't make any sense unless they rely on this within their business model
  • #9
  • May 10, 2021 7:25am May 10, 2021 7:25am
Quoting rockit
{quote} Because it is a charge, a positive value means you are charged something (-+ equals -), and if the charge is negative, then you are credited (-- equals +). This is how I understand it.
Correct
  • #10
  • May 10, 2021 7:49am May 10, 2021 7:49am
Quoting Blad4
{quote} Agree to the first part. However, their swaps look like they are priced very good. However, when they flip it at the end, it means a) you'll never get an actual credit from any instrument (no long swaps are priced - and no shorts are priced +), and b) arbing just won't work
Ok, so your complaint isn't actually that their swaps are going against the differentials but that they briefly change the swaps just before rollover and then change them back after??

That should be easy enough to track and call them out on. It is certainly not playing the game fairly if they do that, and fairly uncommon amongst other brokers.
  • #11
  • May 10, 2021 9:21am May 10, 2021 9:21am
Excerpts from their T&CS...

Financing charge on Rolling Spot FX

The financing charge for a rolling spot FX reflects the relative interest rates of the two currencies ...
...
Financing charges on rolling spot FX are also referred to as swap charges and are quoted in swap points.
A negative swap point if you are net long the FX pair will result in your Account being credited, and you will
receive funding. A positive swap point charge when long will result in your Account being debited and you
will pay funding.
  • #12
  • Last Post: Jun 1, 2021 6:45am Jun 1, 2021 6:45am
Just FYI, FXCM and Dukascopy definitely do NOT have this issue (they will credit positive long swaps as usual, whereas LMAX will debit)
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